AMP’s executive chairman, Mike Wilkins has blamed “a small number of individuals in our advice business” for the problems which have beset the company out of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
He also declared that AMP has nearly completed the workplace investigation to “understand accountabilities for the issues in the advice business”.
“We intend to exercise tough sanctions for any individuals found to have acted inappropriately and against our code of conduct,” Wilkins said
Addressing the company’s annual general meeting, Wilkins claimed no organisation should consider itself immune from the failings which had beset AMP but then stated: “a small number of individuals in our advice business made the decision not to follow policy, and inappropriately charged fees to customers where no service was provided”.
“The situation was compounded through a series of communications that misrepresented the issue to – and therefore misled – our regulator on several occasions,” Wilkins told the AGM.
The AMP executive chairman also acknowledged whether there was more to come out of the advice business and reinforced the likelihood that the company was expecting to have to meet further customer remediation costs and associated expenses.
Comments
Sounds like steaming pile of it to me. Mike Wilkins and AMP still failing to own up and take responsibility. This situation is not one or two people, involved in one or two isolated events. Am i the only person who sees this as long term rot?
Some pretty senior recalcitrants there. It says a lot about a culture of arrogance that it was thought acceptable (as long as you don't get caught) up to board level
Suppose it is only marginally better than the Unions who had even worse corruption and illegal activities such as blatantly destroying evidence and committing perjury in their RC, but since then have effectively thumbed their noses at the law and society in general and continued on. Many of those recalcitrants are still in their roles on boards and suffered no penalties or been effectively pursued (perhaps not surprisingly, not even by the same main stream media that is happily persecuting planners since 2008). Not vindicating AMP but one has to question why one side gets away scot free on proven issues and the other is so openly vilified. No I don't work or have any allegiance to AMP, just morally offended more by the vileness, mistruths and seeming impenetrable protection that the socialist Labor and the corrupt Unions.
I think we've heard this "small number" of bad apples argument before. It's rarely true and this sure isn't one of those occasions.
Typical corporate behaviour (or is it human behaviour). Blame someone else, say they have been held to account and the problems fixed and return to business as usual. By the time it blows up again we'll have made our money and be gone and it won't be our problem.
The Royal Commission highlights the problems are systemic and not the cause of a few bad apples. The bad apples are nothing more than a symptom of an incentive structure that conflicts with consumers. That's why its happened before and will keep happening until product sales are separated from advice via the banning of commissions.
Hey Jason, agree with most of what you've sent but not regarding commissions, specifically commissions on life insurance. Commissions on super and investment have been gone for a long time now, apart from some legacy products. Once advice is separated from product manufacturers the method of payment shouldn't matter, all insurers now pay the same commission rate under LIF. You see a general insurance broker, they get a commission, you see a real estate agent, they get a commission, it's no different getting advice on your life insurance.
Brett, it is only no different if you admit you are a salesperson, rather than an adviser. You are either an adviser being paid by the client OR a salesperson being paid by the product provider.
Your comparison with a real estate agent is a good one, as they represent the seller (product provider) not the buyer (consumer). When people that consider themselves as advisers stop operating as salespeople they may actually become real advisers.
The self interest of commissions is incredibly blinding.
Utter rubbish Jason. The real estate agent isn't selling any product but their service. People need to understand that some industries operate on a commission / success fee basis and always will. If you were selling your house would you be happy to employ a real estate agent on a fee for service basis? You pay a fee for their marketing package and then a fee for the time they spend trying to sell your house, charged hourly. 3 months down the track they haven't sold your house and you want to try a different agent, are you happy to pay their invoice for $5k for their time?
I can give a client a quote and recommend which product suits them best in 5 minutes. What my clients are really getting from me, and any other decent Adviser, is advice on appropriate sums insured which are tied to their financial and family situation, which are reviewed regularly and adjusted as needed. To call me a salesperson because I take a commission rather than charge a fee shows a lot of inexperience on your part.
I would love to be able to charge a fee for my advice on the insurance side of the business but with the way the compliance regime is at the moment, that fee is not affordable for the average mum and dad client. If they lessen the compliance burden so we can provide advice that takes 2-3 hours to put together and charge a fee of $700 - $1,000 perhaps its viable but currently the bare minimum would be $1,500 for the initial advice, plus an implementation fee, plus a fee every time they want a review or ask a question about their policies, plus a fee (potentially a huge fee) at claim time. It doesn't work.
Pretty well any Adviser that says they are fee for service on insurance is only doing that as part of more comprehensive advice, not standalone insurance advice.
Well said Brett, totally concur with your comments.
Brett, your comments have only served to support everything I said. You are clearly clouded by commissions. Next thing you will be arguing they are not a conflict of interest like Katherine did on here last year.
Let's start with real estate agents (I can't believe this even needs explaining). They are engaged by the owner of the property for the purpose of selling the property. They are only paid by the owner of the property and typically only if the property is sold. They are not engaged by the purchaser for the purchase of the property or paid by the purchaser. The only service they provide is the sale of property for the owner. They are a salesperson.
Yes, some business operate on a commission or success fee basis. These are sales businesses. There is no problem with this, but don't put lipstick on a pig and claim it's not a pig.
If you believe your situation is similar to a real estate agent then you must be salesperson representing the product providers. I suspect you believe you represent the consumers seeking advice, but you clearly don't understand the relationships and responsibilities you have to the parties involved, otherwise how could you compare yourself with a real estate agent.
You say you'd love to charge a fee for your advice. There is only one thing stopping you and that's you. More and more advisers are and people will pay for this conflict free advice. How do I know. Because I do, which I suspect puts me one up on you for experience.
Stop believing the BS reasons put up for why it won't work and give it a genuine go. You will have one of the more compelling client propositions and differentiate yourself from most others.
Jason, what product provider is the real estate agent employed by? what product are they selling? your example makes no sense at all. They are not selling anything but their service, experience and knowledge in the real estate industry. The same as an Adviser advising on life insurance.
I'm not saying that commissions are the best way to go but with the current compliance regime I think they are the only viable option - that's for the client and the Adviser.
Great for you if you are working on a fee for service basis for insurance only advice, but I would ask, how many claims have you handled on a fee for service basis? I bet the answer is a big fat zero.
If you could post your full name and your website link on here that'd be great, I'd like to have a look at your FSG to confirm that you don't take commissions? My name is Brett Handke.
Ha they still don't get it. The whole business model is the problem, vertical integration can never in any circumstances be in the best interest of the client. Until they separate Advisers from product manufacturers the problem will continue to exist.
Wilkins is clearly not up to the job of fixing the issues at AMP if what is reported here is what he believes. It seems to me that AMP is more than happy to blame everyone except their own Board and Executive Management.
The reality is that the Board and Executive Management are ultimately responsible for this sort of behaviour through the culture they create and the policies and procedures that they implement and are expected to monitor. Nobody could logically argue that AMP or any other financial institution could never have bad apples, but the Board and Executive Management are responsible for making sure that the controls they put in place are sufficient to bring to light and curtail inappropriate behaviour.
AMP and the others who have been caught out would do well to stop blaming everyone else and to act in a much more contrite manner. Doing so and assuring the public that they accept responsibility and will act to as far are possible to prevent such things from ever happening again is the fastest way to rebuild public confidence. By failing to do so they risk losing their social licence as the mining industry did some decades ago before the mining boom.
Goodness me - the new guy (Mike Wilkins)is a muppet like the rest - AMP have a long entrenched behavior of love the planner hate the planner - and never is management are they accountable for the tarnishing of the business- (AMP non planning management) ( Yes I was an AMP Adviser) _ They have their entrenched darlings who can do no wrong - and a compliance and audit capability that is fair by industry standards. What Mike Wilkins person doesnt get - is that the RC was orchestrated to show that the management team was compliant in malfeasance ( no adviser doctored the report to ASIC.it was his leadership team - Leadership should be about bringing a team together - not slagging off at those least able to be identified and defend themselves. If they knew they had bad apples ( and apparently they did ) why did they continue to force growth (buy out of AXA) and without addressing the issues first. Blind freddy knows one side of politics has been chasing the opportunity to denigrate planners and the wealth management business. That side of the political divide has used the RC quite effectively to highlight unconscionable behaviour and under the spotlight of the RC and dont cry because the media that is part of the process. The reputational damage the senior managers have wrought through their own in action upon all good planners is dreadful. Personally I think this could be seen as a bit of Kharma - what goes around comes around. Instead of treating the advisers like the enemy - maybe they could pull their collective heads in - understand the issue first - engage the stakeholders - and then seek remediation.
For the lies to be told to the Regulator, that has nothing to do with the financial advisers regardless of what they did or did not do. That is the decision of Management and that is surely undertaken in consultation with the legal advisers. When are Management going to recognise their responsibilities and when are we gong to have a Royal Commission into the Law industry?
Garbage. It was AMP management charging fees for no service on orphan clients! Its AMP management who are at fault and have nobody to blame but themselves and still they try and shift it. Where are the criminal charges against the execs responsible as there would be if it was an adviser?
The woeful culture of AMP can be traced way back. These are certainly not new behaviours, rather, they are just newly discovered behaviours. And to blame a few individuals for the 'car crash' is beyond ridiculous and just demonstrates their abysmal corporate culture. If AMP were a horse, they would be erecting the privacy screen about now. Good luck to shareholders and all those in receipt of AMP's version of financial advice, you certainly do need it.
Are agency development loans, or loans in some form of description not to worry about the names to acquire books of business or assist with the development of the practice still being made or was this something of the past.
I have never been a big fan of lawyers, and putting all my hopes in the hands of Kenneth Hayne and his team to deliver us from this evil is a big call.
But please Mr Hayne, can you please make sure these people don't get away with what they have done?
I was an AMP adviser for a year, and ran as fast as I could. The culture is obnoxious and scary. It is not a"few advisers" doing the wrong thing. It is endemic and culturally toxic to the profession we call "advice".
But did you read the other submissions too? Sam Henderson clearly doesn't think he has done anything wrong either.
I am in mourning for financial advice at the moment. Make the blame-shifting stop.
Admit it was what it was, and let's fix it and work for our clients. Please?
Well put Melinda. You can also add the 4 major banks to the list of toxic cultures as well. But can rest easy about the role the royal commission will play. It has already brought so much to the attention of the public already, and has yet to hand down a final report!
And those that have been running financial planning within these institutions are at last being seen to be what they really are, imbeciles. In fact, I actually get dumber each time I watch any of the executives giving testimony at the commission! I have to watch playschool immediately after to restore my cognitive powers!
Fear, not Melinda, change is coming.
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